By MATTHEW D. ERNST
WASHINGTON, D.C. — The USDA forecast lower yields and ending stocks for corn and soybeans in its Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports released Monday.
While record total corn production is still expected this year, soybean yields still remain difficult to estimate; wheat numbers remain in line with previous reports and trade expectations.
The trade market was expecting an increase in corn and a decrease in soybean production. Corn surprised many analysts, with projections for average corn yield at 154.6 bushels per acre, down from the previous estimate of 156.6.
“That puts corn ending stocks at 1.837 billion bushels, which is still a burdensome number but down from last month’s 1.959 (billion),” said Brian Hoops of Midwest Market Solutions.
The USDA still forecasts a record total corn production this year, at 13.763 billion bushels.
And corn yield estimates still represent recovery from last year, said analyst Jerrod Kitt of the Linn Group.
“We’ve seen a remarkable bounce-back, especially in the Eastern Belt,” he explained. The USDA projects 165-bushel average corn yield per acre in Illinois, 166 in Indiana and 172 in Ohio; all three states could see record corn yields this season, said Kitt.
Iowa corn production is a different story, with a current yield forecast at 163 bushels per acre. “A lot of the west and central part (of Iowa) are really just hanging on,” said Kitt, citing concerns for adequate moisture in those regions.
The USDA report also projects corn yields declining in North Dakota, a strong corn producer last year but, so far, lacking desired rainfall this season.
The average soybean yield decline, though surprising to many, is not totally unexpected, said Bill Tierney of Ag Resource Co.
“The (soybean) trade is acting like they’re from Missouri. You got to ‘Show Me’ that yield before I believe that yield,” he said. He added, relative to soybeans, “It is very, very difficult to come up with a yield estimate this early.”
The WASDE report pegged ending stocks of soybeans at 220 billion bushels, declined from last month’s 295 billion. “Both corn and soybean ending stocks were really much snugger than the average trade guess, and really caught the trade off-guard,” said Hoops.
Total soybean acreage is 500,000 fewer than USDA June estimates, reflecting a re-survey of actual planted acres in many key states. This decline was half of the 1 million-acre drop expected by some analysts.
Wheat estimates in the USDA reports were in line with trade expectations and the last USDA report. Spring wheat production was estimated at 511 million bushels, slightly fewer than in 2012.
“We also see a slightly smaller winter wheat crop, which is directly contradictory to what we see in corn and soybeans, which are having a robust year and larger crops compared to a year ago,” said Hoops.
Wheat demand shows some strength. “Wheat demand was increased to 1.1 billion bushels,” he added, commenting on the WASDE numbers. “The demand we see right now on our weekly export sales report shows the strongest August wheat demand since 1990.”